A £100 million-a-year contract to run London's Oyster card system is to be terminated under moves aimed at saving millions of pounds.

Transport for London (TfL) said that it had given notice to TranSys, the consortium running the contract to maintain and develop Oyster cards, used by millions of people to pay for travel in the capital.

TfL said that the announcement had nothing to do with recent problems with the system, which led to ticket barriers at Tube stations being kept open at all stations last month.

A statement said that Mayor Boris Johnson and TfL were convinced that any new contract would deliver enhanced services for less money, making significant savings.

'The Mayor is keen to improve the Oyster card to make it even more attractive for Londoners, and TfL will work to make sure this happens, both quickly and in a way that represents the best value,' the statement said.

Shashi Verma, TfL's director of fares and ticketing, said: 'Transport for London is committed to delivering value for money across all of its services. As part of this we are looking at more cost effective ways to manage and develop the Oyster card system that we expect will save millions over the next few years.

'The savings will be reinvested to deliver further improvements in London's transport system.'

The contract was due to run until 2015 but will now end in 2010, with TfL exercising a 'break option'.

TranSys shareholders include Cubic (UK), EDS International, Fujitsu Services and WS Atkins Consultants. The contract was put in place in 1998 for a term of 17 years.

About six million Oyster cards are now in use, accepted on 38 million journeys every week on Tubes, buses and railways.